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A prominent XRP and crypto analyst has shared market evidence to debunk claims that XRP’s underperformance is due to an increase in supply.
CryptoInsightUK is a top market analyst who remains bullish on XRP amid prevalent investor angst. The market watcher has continued to dispel false claims about XRP’s price direction and the factors behind its underperformance.
Some XRP community members have attributed the underperformance to the inflation caused by Ripple’s monthly escrow releases and subsequent XRP sales. However, others have persistently debunked these claims, with CryptoInsightUK recently sharing market evidence to back his argument.
XRP Supply Against Broader Crypto Market
He pointed out that XRP hit a price of $3.37 on Jan. 7, 2018, when its circulating supply stood at 38.7 billion. At this point, XRP had a market cap of $130.4 billion, while the total market cap of the crypto industry was $711 billion. XRP accounted for over 18% of the global crypto market cap.
I am going to debunk 1 $XRP hater argument very quickly right now.
The argument around supply restricting price discovery.
On January 7th 2018, $XRP price was $3.37, with a circulating supply of 38.7 Billion $XRP.
At this time, the total market cap of crypto was $711 Billion;… pic.twitter.com/jFooMssD31
— Cryptoinsightuk (@Cryptoinsightuk) February 19, 2024
CryptoInsightUK further highlighted that XRP’s circulating supply had increased to 47 billion as of Nov. 7, 2021. This marked a 21% increase in circulating supply in nearly four years. However, it bears mentioning that the broader crypto market recorded a bull run in 2021.
This bull run resulted in a surge in the broader crypto market cap to $3.032 trillion as of Nov. 7, 2021, marking a 325% increase from the $711 billion valuation recorded in January 2018. The rise had led to an addition of over $2.32 trillion in the crypto market over four years.
In a subsequent remark, he showed that other crypto assets had also increased their circulating supplies. For instance, Ethereum’s (ETH) supply rose by 22%. Nonetheless, despite recording a larger inflation rate, ETH rose 382% within this timeframe. This also occurred with other assets.
CryptoInsightUK emphasized that the fact that the broader crypto market recorded an additional $2.3 trillion when XRP’s supply increased by 21% shows that the XRP’s underperformance is not due to its inflation rate.
The market analyst acknowledged that some external factors could contribute to XRP’s underwhelming price movements. However, he stressed that market participants should not hold the belief that this factor is the increase in the token’s supply.
The HBAR Case
In a separate analysis, market watcher and Hedera (HBAR) investor CrediBULL shared similar sentiments regarding the inflation rate of cryptocurrencies. Interestingly, HBAR investors also believe the token’s price is down due to an increase in supply.
Pro-crypto attorney Bill Morgan highlighted CrediBULL’s remarks. The market analyst pointed out that HBAR was trading in the $0.20 to $0.25 range in February 2022 when its supply was around 15 billion tokens.
Great explanation. People in the #XRPcommunity carrying on about Ripple dumping should listen to this and draw some lessons. HBAR’s supply increasing from 15 billion to 33 billion in two years but the HBAR price higher than two years ago. This is because the circulating supply is… https://t.co/FBidJ29iYt
— bill morgan (@Belisarius2020) February 19, 2024
Notably, HBAR’s price collapsed with the rest of the crypto market as the token’s supply rose. The price hit a bottom of $0.0355 on Dec. 31, 2022. Since then, HBAR’s supply has continued to increase, reaching 33 billion tokens as of press time.
However, the price has surged since December 2022 despite the persistent increase in supply, with HBAR recording a 204% increase in value within this timeframe.
CrediBULL confirmed that smart money investors have continued accumulating the increase in supply, a trend in every market.
This trend usually leads to an accumulation phase in the market, which usually precedes a period of the market uptrend.
Attorney Morgan noted that this pattern is the same with XRP, where the supply has increased over the years. He noted that the underperformance is not particularly due to the increased supply.